years ago when lehman brothers collapsed? me, i was doing six hours a day on the imminent ltdown of our entire financial structure. it was a good time. are we really any better off two years later? what should we have done differently and what, if anything, can we do about it now in the show starts right now. all right. good afternoon to you. in america today, new rumblings from the volcano of voter discontent that is america. the headlines read tea party coup, bye bye bums and gop nightmare. but to us, this all looks more like the last days of pompeii. >> we can't stay here. we have to go. >> tea party power boiling over in two states, nearly toppling the establishment and a third.

christine o'donnell storming the castle, as they are saying in delaware. congressman mike castle who has never lost a race before last night ousted. she will be the party's senate canned do the come november. and of course, guesses who support she has all of a sudden the day after the primary? none other than 2012 presidential front-runner mitt romney. here in new york, carl pal dino stunning perennial loser, lazio. this time, lazio's race to lose. he lost it nearby new hampshire, a fit to the finish, tea party-backed la montan ya narrowly beaten by establishment-support kelly iyat. the recount still to come. clearly, tea partiers fighting the establishment, effectively so in some cases, ineffectively in others but the rumble are indeed afoot. we know they don't like democrat bus don't much care for the current gop. and like the people of pompeii who never sought eruption of vesuvius coming, if you are part of the political establishment

in this country, wake up. both parties appear clueless about their own impending destruction. >> minor earth tremors plague the city. they are one of the signs that vesuvius is stirring. but none of the 20,000 people who live here can read the signs. >> well, the democrats, for their part, celebrating today, understandably so all signs point to tea party candidates getting bagged in the november elections. it's as if the tea party, full, is loading the gop gun with blanks. who wouldn't want to go to a gun fight with somebody whose gun you know is loaded with blanks? but even if the insurgency is able to pull off a win, the political volcano that we are dealing with is still headed for an eruption, whether -- i should say unless our politicians finally begin to pay attention to vesuvius. what is vesuvius, you ask?

i say it is a system that clearly benefits a very small number of americans who use money to influence our government and make every other current and future american pay for the indulgence of perpetuating their desires and their interests at everybody else's expense. both parties helped make that happen. our first guest today, ohio democratic senator sherrod brown. senator brown, how do you look at this from a political strategy standpoint? again, the early appearances are that it may benefit a little bit of the overall democratic momentum. do you share that sentiment? >> well, i guess, that is a lot of inside baseball. and probably that is what most people are saying. i think you look a couple of ways, dylan. one this is the eighth time that the republican establishment, washington, has endorsed a senate candidate, eight different states, the eighth time that candidate has lost. so the disconnect between the republican establishment and washington in the grass roots of their own party. the other lesson is that people are clearly angry and have a

right to be. the issue ultimately is who got us into this situation? how do we get out? we are losing 800,000 jobs a year ago when president obama took the oath of office. 800,000 a month. now we are gaining jobs not fast enough. but i think the voters are smart enough to think we don't want to go back to this crowd, the people that brought us into this. and in my state that is mike dewine, rob portman and john kasich, three long-time republican officeholders that helped bring us the collapse on wall street and the loss manufacturing jobs and the trade agreements that sold out our workers and sold out our small manufacturing companies. and so i think that is the lesson i take out of. this and one more point, i like what you said two or three minutes ago when you said it is not small businesses, it's new businesses that create jobs. i think that's about 80, 90% true. it is the new companies that we need to work with in partnership, as i do around my state to help them get the capital and get going and start hiring two people and five people and ten people, growing

into the medium-sized and larger companies. >> can we stop there briefly? i want to come back, but let's stop on new business briefly, because i actually think it is the most important -- you can't create jobs if you don't encourage new business. you talk about everything, the republicans before 'bama, for that matter, democrats before bush have done, most of the things done in this country have been to preserve old business, not to encourage new business. and i would say that includes the incumbent democrats. in other words, while people may agree with your assessment, the republicans are not going to help me? if you look at the polling, and even after yesterday, you look at nate silver, chances of a november takeover of the republicans in the house is still an 80% after all the sort of disruptions. how do you deal with the fact there is a rising sense that democrats are no better equipped to help this country get back on a path to fairness than republicans are? >> well, polling doesn't make it so. i understand people's anger. i understand people are going to be angry at the party in power.

but when -- when you look at the -- let me give you one statistic. when bill clinton was president, 22 million new jobs in private sector created. when george bush was president, 1 million jobs created. i don't think the voters want to go back to those bush economic policies and the candidates that are running are mostly preaching, the republicans we should go back to deregulation of wall street, more trade agreements and outsource jobs and more tax cuts for the rich. that doesn't work. so that is the contrast we have to make. >> i agree with that. >> but i think write disagree is that the democrats are that much better. in other words, i think what -- in my opinion, what we are seeing as a disappointment that having switched away from the obvious failures of the republicans for eight years and the belief that barack obama as a president was going to engage the six major industries that control our government to protect old business in this country from anything else, the banks, the ag industry, the energy industry, the defense industry, the people who provide money to the vast majority of

our politicians, and they haven't seen that from democrats and are now tea partiers, or whatever you want to call them, there are fewer and fewer people willing to accept the empty promises of either party. >> well, i, okay, i accept that. i mean, i wish my party would stand up to the big banks a little more than we do, maybe a lot more into wall street. but let me give you an example where it is not just about new businesses creating jobs. because we made a decision a year and a half ago to not let the auto industry fail, the naysayers and the conservative politicians were saying let the market work, let the auto industry fail. because we invested tax dollars into the auto industry, governor strickland and i last week were in youngstown, ohio, celebrating 4500 jobs, 1500 new jobs, making the chevy cruz, the best mileage car i believe gm has ever produced. that is thousands of people back at work because we invested in the auto industry. tax payers are going to get

their money back. we didn't want to take over the auto industry. we invested in it. the government will get its money back. taxpayers will be made close to whole. tens of thousands of people, maybe hundreds of thousands of people and hundreds of thousand of retirees are going to be in a lot better shape because of it. it is not so simple as get the government off our back it is partnership wednesday they work. both parties are too close to wall street and all that. >> not just wall street, but all industries, right in the defense industries, the health care industry? >> it is clear who is really in the pocket of wall street, the big insurance companies, the big drug companies. looking at the health care bill, look who was fighting on behalf of consumers, the exception of two or three people no republicans making that fight the way i was and you were on the air and other people. >> understood. listen, pleasure senator brown, truly, thank you very much. >> my pleasure. >> thank you. flipping to the other side of the aisle but staying with a friend of the show, will the voter vol cape know melt the republican establishment? what is the republican establishment? well, depends on how ask.

senator tom coburn joining us right now. senator, are you there? >> i'm here. >> how do you interpret yesterday's primary results on the gop side? >> all i think is a lot of people are sick and tired of washington and they are sick and tired of career politicians and they are ready to send somebody who isn't one of those and doesn't have anything to do with party. >> so you know i largely agree with that so the question then becomes either how do we get the change in the incumbent politicians, whether it is like yourself and senator brown and others, really, others less like you in my opinion and more people like you guys is my view, and is this a -- is this a enough cage-rattling with the tea party to start inspire some of the really entrenched politicians in d.c.? is this a wakeup call? >> dylan, i have traveled a lot all over the country. you know, i come from oklahoma.

it is a pretty conservative state. but i can tell you the message that i hear throughout the country is the same message i hear in oklahoma. and i think they are relooking what the we have don't last 30 years in this country with career politician it is and saying maybe we would be better off if we send somebody up to washington who has real-world experience that has really been through the school of hard knocks that knows what it's like to make a payroll or earn a -- earn a paycheck. maybe they will apply some common sense to the -- $13.5 trillion debt and $1.4 trillion deficit. we have -- failed to prioritize anything in terms of all the waste and fraud and abuse in the government. why wouldn't we do that for kur

oisd and grand kids and the taxpayers today? why would we not do that in the fact be is i have a flattened forehead from beating my head up against the wall trying to get people to think, why don't we just get rid of the things that aren't working so we can pay for some of the things we know we need to pay for, rather than borrow against our children. >> maybe this is too cynic aal on my part. i will ask you the same question we ask senator brown if we are to accept the opinion that i express, that six major industries or groups, whatever you call it largely provide the bulk of the financing for the vast majority of politicians in this country, period, and that those businesses or industries that are older businesses are serving to protect their interests at the expense of new businesses, new americans, new ideas and the politicians, whether it is consciously or not, are serving that interest and that is part of the volcano of discontent? >> i think there's some -- a lot

of val did to what you said, but just goes back, the politicians have manipulated the campaign finance law, we have limited who can do what i looked a at virginia, haven't had any problems within their campaign finance at all within 30 years and theirs is no limits, you got to publish it. if i have a conflict of interest and publishing it that is going to control me better than any sets of rules or regulations. >> i totally agree. >> transparency is the answer. we can't get an earmarked transparency bill so the american people can find out what the earmarks are who is getting the benefit shot, well-connected person that is going to benefit from this and what is the campaign finance payments for getting earmarks? >> do you think you could get a law that would mandate forced disclosure to your point, where the legal onus would be on somebody like you do with your job, if you fail to disclose, you are automatically in violation, as opposed to current ver? >> we have disclosure now but tough go to 550 cites to find

all the information. so, in essence, and we have that rule, you have to disclose it, except the american people can't find it because you got to go, you know, takes you 20 thundershowers find one little deal. so, in truth, we have manipulated the system to make it obtuse and not clear and what we ought to be about is transparency. you know if we really have transparency in washington, most of these problems would go away. if we would really set the rules where it's 100% transparent. you know what my schedule, you know howed dinner with and on what subject, let's make it all transparent. if i'm your elected representative and i'm representing you, you ought to know what i'm doing. >> i can track you on a website, a little beacon, the coburn avatar trotting across to charlie palmer's. >> as long as you didn't track me while i was snoring at night. >> with your sleep is yours, senator. thank you for the conversation. >> all right. >> good to see you. >> you, as well. tom coburn out of d.c. coming up here on the dylan

ratigan show, two years after the lehman brothers collapse, would you ever thought we would still be in such poor shape, out of the top three in foreign direct investment, unemployment rising, lending down, hope falling and the big bank stocks took business as usual, paying record bonuses with the taxpayer out $4 trillion? we will look at where we went john and more importantly, what we can do about it now, right after this.

the news of the day, specifically the lehman wroers

bankruptcy filing, the largest bankruptcy in american history. >> walk through the threat of this entire experience, something that came out of nowhere. the blowback became unendurable, which is why lehman brothers is now bankrupt. >> remember it like it was yesterday. the collapse of lehman brothers. what fun two years ago today. we are breaking it down 24 months on. that event triggering fear, panic and ultimately used by our government to justify handing out trillions of dollars in bailout cash to a select circle of friends with absolutely no strings attached. $4.74 trillion. each trillion of that would be $1,000 billion. the total amount now disbursed through the bailout programs. it gutted a few jobs some, you know. $2 trillion of that still outstanding. but let's consider for just a moment, shall we, what we could have done with that nearly $5 trillion instead of forking it over to the banks.

we could have paid off almost half the mortgages on every houses in america. that is $11 trillion total in all the mortgages out there 5 trillion a nice crack obviously out of that or we could take money out of all elections for every candidate in every campaign, not forever, but for the next 2,000 years. that stat based on '06 and '08 spending of 278 and 6.2 billion respectively. not that we ultimately think publicly financed elections are the solution, but it could be, a long way toward leveling the playing field, secret money from six major industries controlling all of our politicians. but forget all that for a second, $5 trillion after all. we could take a ride to neptune and back. scientists at johns hopkins say it would be possible with $4.7 trillion to get all the way to neptune and home, but instead, we spent it on the following. $5 trillion for a total of $145 billion in wall street bonuses paid to out in '09. that doesn't seem like a great

return a few thousand jobs created here and there gm, you heard from senator brown s it worth 5 trillion? our government used itted it to save a handful of reputations, specifically larry summers, alan greenspan, hank paulson, bob bernanke and paul ruben. it is important to make sure the tax pairs spend money to make sure they don't look bad in public because they are the ones created the system that destroyed our country and important they control the government so they can make sure they cover up the destruction as they extract the money. it is going to cost $4 trillion what can we do? as a result, we have watched foreign direct investment over the past two years in this country plummet to the lowest level it has been ever, at least since world war ii. unemployment continues to rise and lending has gone away. let's see, we have got reputational saving. we have got few hundred billion in bonuses. and we have got a completely deprived country of any basic sense of fairness or natural course of business where things fail and things are created

because the old businesses control the government because, well, they can. joining us now, mark inge, founder, editor of exile online. if you look at the facts here, the amount of money from this country and all the -- everything i was just describing, how does a country get to a place where the money and the government are so intimately aligned that they are able to corrupt a country as severely as ours has been corrupted with the six industries that control our government and this being just one with example of it? >> sadly, i think it's just more proof that america is in pretty serious decline right now. i have seen this having worked and lived out in russia for quite a while with. -- quite a while. decline can go on for many, many years. you think you have seen it all and can't get work, it can get a lot worse. that is my mantra now, it can get wofrms and until we come up

with, you know, serious ideas on how to change this, not just changing candidates, or taking a different position onrse. and until we come up with, you know, serious ideas on how to change this, not just changing candidates, or taking a different position on an issue, but serious big-picture changes in this country and the direction we are in, i don't see how we can pull ourselves out of this mess. >> the truth of the matter is unlike just to put a sunnier face on it make you feel better for a second, mark -- >> please do. >> we -- with proper political leadership, we are the only country in the world that is a debtor in its own currency, which probably sounds like begin rush to a lot of people. unlike russia or other countries, we have the unique ability to print our own money and no one can do anything about t now, we are exploiting that for the negative right now, but the point is for america, there is a clear path to fix this country. it is just clear that neither political party is willing to do

it because they work for the exact special interests that are profiting from the decline of this country. i'm interested, from your perspective, when it is clear that a group has taken possession of the government in this case, six industries, for its enrichment and at the expense and decline of a nation, is there a political response, particularly in the con toesks -- context of the american democracy and did we see that yesterday with the tea party, even if it was misguided? >> i think senator coburn is wrong this is about throwing out the bums and bringing in new, fresh faces. i think it was actual about ideological purification on the republican side. i think people have been essentially brainwashed for the last three or four decades on libertarian free market ideology. and even though we have seen that it completely failed us, we have no fallback ideology. i mean, the democrats don't stand for anything that i can tell. they are against the craziness of the republicans, but they are

not for some -- >> what about being for capitalism, where you actual hadly is to invest and lend money and actually work and the banking system is treated like it is, which is a utility on the monopoly board, not given the opportunity to reverse the system of the entire country to suck all its blood like a vampire? >> they are not this they are not that, as comp plealy behold ton wall street as republicans or not as corrupt or not going to get -- what are they actually for? did they say they actually were for government, for government, you know, for big government or any kind of government? they don't. they are sort of a negative of a negative. and the tea party takes this dominant ideology and really purifies it. and people are very confused now. people are very dramatized. some ways, the idea that all of these people would be voting for a more pure if i had form of free market ideology after all the disasters we have been

through it almost kind of remind mess of d.c. boaters 15 years ago, voting for marion barry after he was busted with drugs and people were very ashame and confused why would they do that? because those voters 15 years ago were very dramatized. they didn't trust the establishment and they went sort of counter intuitively for a candidate hot establishment was against. and that is how i see it going on with the tea party. they are almost out of spite or out of anger at the establishment going for, voting for' the candidates against the establishment there should be a tea party in the democrat party that is what i'm personally hoping for, something much more seriously thinking about ideology and ideas and not just issue by issue or a negative of the republican. >> what about just any political constituency that is honest about the fact that our government a complete possession of six major industries and we have to remove those six major

industries and the -- their vampire teeth from the neck of the american people and both political parties are happy to suck the blood? >> yeah, well we probably need two new political parties, but ultimately, it's hard to fight six very, very powerful and rich industries, especially when they have taken all the money from the rest of us it is hard to fight it unless you actually have a vision for the world or for america and the way america should be. >> or if you have a president with enough audacity to do it. we have seen it with the past presidents. the president of the united states is, in fact, tough enough to tell any group of industries not to do it and i think a lot of folk also been hoping that president obama had that level of audacity and obviously have been disappointed by the fact that he is an act of those industries, not an opponent of those industries. >> i mean, sadly, the fix was in going back to november, you know, shortly after the election when bob ruben was creating the economic team and larry summers and geithner, these are all the

guys that created the problem and then they are there to sit on the mess and cover their behinds. so the fix was in pretty early unfortunately. >> i feel like we are getting closer and closer to the problem and now we just need the right people on the job, mr. ames. i think we will get this done. mark ames, exiled online.com. >> you, too. ahead here, a statement on the economy from our president. live from the rose garden, talking about small businesses. should he be talking about new businesses? the liquor store in saran knack lake where i have grown up has had two employees the past 40 years it is a small business, but certainly not creating any jobs. can the president make the turn to new businesses that do fuel job growth in this country? we will join him right after this. in times like these, you need an experienced partner to look out for you.

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incentive bill intended to boost our economy and create jobs. but do small businesses create jobs or do new businesses create jobs? big difference. we will also see if the president says anything at all about tuesday's primary results. and of course, the big tea party upset in delaware as we p. as we prepare for the comes we joined by chris could have phone nas, dave weigel and robert lipman from the kaufman foundation which focuses on new business versus old business when it comes to job creation. chris could ha chris, i will begin with you, what card is the president playing here, postprimary, lots of electseering at work? >> i think he will make a stark contrast between his vision and the republican vision. the small business bill was being held up by politics.

i think this is a good piece of legislation, $30 billion, potentially $300 billion worth of lending. it will spur growth, not immediately, but the long term. small businesses help create jobs and new jobs. and i think this is a piece of the president's overall economic vision, one we have to hammer in clearly if we are going to make this contrast between ourselves and the republican party. >> dave weigle, what do you say? politics of this whole seen day after primary? >> this bill in particular, the small business bill is a perfect example of a piece of legislation that is for small business and irritates lobbyists and special interests because they didn't really deal with this really onerous provision of filing documents every time you make purchases over $600. i think the democrats have room to pass something that would be popular, not terribly effective, i suggest people read greg man cue on how effective these

things would be, but if he is done with the small business bill, that is not that impressive. i would like to hear him talk more about the -- his version of the tax extension, the bush tax cuts which would get -- not deal with some of the higher-end tax cuts. the small business bill, not that impressive. >> mr. lipman, if you could. ible to us the flawed logic of looking at small businesses as an engine of growth for jobs. >> okay. so the kaufman foundation for the last several years has sponsored and undertake on its own research to look at the source of net job creation and what we have found, since 1980, virtually 100% of all net new jobs created in the united states have been founded by new businesses. and so, that's slice of small businesses that we really need to focus on. so you're quite correct when you make this distinction between small business and new business. it is really those businesses under five years and actually

probably less than one or two years old that have been, at least up until the recession, the main sources of job growth. >> and the fact of the matter is new businesses, by coincidence, just happen to be smaller the same way a child happens to be shorter, but we are not in favor of short people. we are trying to educate young people. are we missing the political -- forget the political. is the politics of small businesses, chris could have phone nas, convenient talking point for democrats and republicans alike but really an illustration of their own ignorance but an unwillingness to understand economics in that it is a new business plan, not a small business plan that we need in this country, at the same time, we have an old business plan, which is all the old businesses that control our government to make sure there is no new businesses? >> i don't see it as an

either/or. >> hold on a second. why don't you? you think the liquor store where i grew up in saranac lake that hasn't added a job in 40 years deserves as much attention as future growth as a new business that could hire 50 people you think all small businesses are created equal? >> no, what i would say is you can accomplish both goal, not necessarily mutually exclusive. >> how? >> the small business bill can help new businesses begin that is part of the goal of the small business legislation. >> father and son liquor store in san ran knack lake write grew up going to add a bunch more employees to sell beer to the residents of saranac lake because the president of the united states cut his taxes or should the president, i don't care what his political party is i don't mean to give you just this hard time either, chris, but shouldn't the politicians be

cry trying to create new business initiatives, not just take care of particular sizes of businesses because that is politically popular, some cases, you are wasting money on a guy in saran knack lake, hasn't hire anyone for 30 years, i should help a kid from stanford or the university of austin trying to hire ten new people? >> i think you can accomplish both. i think they should be applauded on the amount of attention they have put on green investments. i read today about the new battery factories opening, this is a new industry because of capital provided by the federal government to start the -- >> that sounds like communism. you are saying we should give all our money to the government and they should decide which new business to start? >> no, i'm saying that basically government does have a role, not necessarily to pick and choose, to help spur and create new

businesses. >> okay. >> you see that as a negative. i see that as a role. they shouldn't be picking losers and winners but they should be helping create and fuel the next great idea. i think this is a good thing for government to do. >> goes to education, lnd lending and vet. instead, dave weigle, you look at the old business, the auto, the old financial legacy, all the businesses that should have collapsed two years ago so that we could reform and adopt all this new technology that exists in our current 2010 reality, how much does the stranglehold of old giant business on the politicians of our government prevent us from really being able to make the switch, dave weigle? >> it doesn't help. the government has been trying to move these dinosaurs in the direction of more innovation that will create more jobs for people that helped them develop hybrid technology. i guess that's fine. but they -- i wish they would focus more on regulation, because it's -- republicans are right that the easier it is to start a business the more you

are going to see. and i don't know why democrats keep whatever reason, leaving onerous rules out there for starting a business, maintaining it. it is tough to get these things going over the first couple of years. i don't agree that with republican idea that we just slash taxes the way that they -- that the bush tax cuts have baked into the system that is going to he create a lot of business. we have had these tax cuts all year and things are pretty lousy. i think targeted tax cuts are fine but make it easier to start a business. that is what you should be talking b. >> last question to you, mr. liten, if you were to look at the most critical variable you see that creates either a vertle environment for new business or a hostile environment, a desert for new business is it lending is it the educational system is it government regulation? what do you find is most determinative to the health and development of new business? or new businesses. >> none of the above. >> great. go ahead. >> none of the above. and the one thing i would put

emphasis on and hasn't gotten enough emphasis and that is on immigration policy and in particular, what we need to do in this country is to allow our highly skilled immigrants who are already here studying at american universities, plus any new immigrants who are willing to come here and to start a business and to hire people, we ought to give them a special green card, call it a job creators' visa it doesn't take a job away from anybody else and in our view, we put out papers of this on our website we think we could get at least 100,000 new businesses started without the federal government spending a dime. >> i hope you will come back and meet us. it is a pleasure to discover some of your research, robert, and for you to give us some time this afternoon. chris and dave, thank you for your analysis. i think i'm going to keep all three of you guys. take a moment. we are back, the president teeing up the podium in the rose garden just seconds ago. we take a quick break. we are back with our panel and the presidentsome it small businesses versus big businesses or is it new businesses versus

old businesses? the statistics say it is the new businesses that make jobs in this country and the old businesses that control our government, trying to protect themselves from new businesses that makes sense. anyway, we are back after this. you need a little website development. some transparent reporting, so you know it's working. online ads and 1-on-1 marketing consultation. yellowbook's got all that. yellowbook360 has a whole spectrum of tools. the perfect recipe for success. visit yellowbook360.com and go beyond yellow. aren't absorbed properly unless taken with food. he recommended citracal. it's different -- it's calcium citrate, so it can be absorbed with or without food. also available in small, easy-to-swallow petites. citracal.

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all right. wore back and go straight to the rose garden and the president. >> still struggling to make payroll and they are still holding off hiring, we put together a plan that would give them some tax relief and make it easier for them to take out loans. it is a bill that is paid for. it won't add a dime to the deficit. it is a bill that was written by both democrats and republicans, but for months, the republican leadership in the senate has said no. for months, they have used legislative man knewors to prevent this bill even coming up for a vote. and all the while, small business owners kept waiting for help and kept putting off plans to hire more workers and grow their businesses. now, thankfully, two republican

senators, senators george voinovich and george lemieux have refused to snore had blockade any longer and because of their decision this small business jobs bill will finally pass. i want to thank them for their efforts because they understand, we simply don't have time anymore to play games, not just simply on this small business jobs bill. let me give you another example, right now, we could decide to extend tax relief for the middle class. right now we could decide that every american household would receive a tax cut to on the first $250,000 of their income. but once again, leads across the aisle are saying no. they want to hold these middle class tax cuts hostage until they get an additional tax cut for the wealthiest 2% of

americans. we simply can't afford that. it would with mean borrowing $700 billion in order to fund these tax cuts for the very wealthiest americans. $700 billion to give a tax cut worth an average of $100,000 to millionaires and billionaires. and it is a tax cut economists say would do little to add momentum to our economy. now, i just don't believe this makes any sense. even as we debate whether it's wise to spend $700 billion on tax breaks for the wealthy, doesn't it make sense for us to move forward with the tax cuts that we all agree on? we should be able to extend right now middle class tax relief on the first $250,000 of income. which by the way, 97% of americans make less than

$250,000 a year. so, right off the bat, 97% of all americans would get tax relief on all their income. people who are making more than $250,000 a year, say you are making half a million dollars, would you still get relief on half your income. and everybody agrees that this makes sense. middle class families need this relief. these are the americans who saw their wages and incomes flat line the past decade, saw the cost of everything from health care to college tuition skyrocket and who have been hardest hit by this recession. extending these tax cuts is right. it is just. it will help our economy because middle class folks are the folks who are most likely to actually spend this tax relief for a new computer for the kids or for maybe some home improvement and

if the other party continues to hold these tax cuts hostage, these are the same families who will suffer the most when their taxes go up next year. and if we can't get an agreement with republicans, that's what will happen. so, we don't have time for anymore games. i understand there is an election coming up, but the american people didn't send us here to just think about our jobs, they sent us here to think about theirs. they sent us here to think about their lives and their children's lives and to be responsible and to be serious about the challenges we face as a nation. that's what members of both parties have now done with the small business jobs bill and i hope we can work together to do the same thing on middle class tax relief in the weeks to come. thanks very much, everybody. >> the president not only addressing the small business package but using this opportunity to come out with his vice president. you saw joe biden there.

and the treasury secretary, tim geithner, to make a political sell, a sales pitch, full, for extending all of the bush tax cuts below $250,000, a year in income, arguing that that is the portion of debate that both parties agree on. let's just do that and then debate the balance of it later. still with us is our panel, dave while withal, chris kofinis and robert litan what do you think of the appeal to the gop to agree in part and worry about the rest later? >> it is what he needs to dologically, if washington worked on logic, it would make a lot of sense. republicans support keeping these tax cuts. these are george bush's tax cuts. the ones that would most popular in 2001, 2003 when he passed these in the first place. it is true, if republicans didn't want to run on -- against the biggest tax increase in

american history, as they call it they would go ahead and do this. i don't know -- i don't know if things like this provide momentum anymore. i'm not sure if george voinovich is gettable on this bill. he has been on the past but he also was a critic of the size of these tax cuts in the first place. he might be gettable but i think he needs to do more working the phones than aggressive talking in front of the cameras, meaning he just needs to talk about it. >> here we are. chris, your -- the political strategy, your interpretations of the political strategy, the witness of the president coming out to talk small business but really coming out with the vice president and the treasury secretary to play let's make a deal with the tax policy relative to the bush policies? >> well, i think the president is drawing a line in the sand and effectively daring republicans to oppose a tax cut that would benefit 95% of the country. i think the optics of that are terrible for the republican party. i don't think republican party cares, to be honest. i mean, given last night's results in delaware and other

places, you know, previous elections, i think any republican is just absolutely ter need there will be tea partied in the next election if they do anything, you know, like supporting what the president wants. so, but in terms of, you know what you're going to see, i think, the next five to six weeks, there is going to be, i think, a very strong message from the white house and the democrats that is going to try to pigeon hole republicans as a party that doesn't make fiscal sense on a key policy. that is the tax cuts. the notion of giving the top 5% tax relief, adding $700 billion to an already exploding debt is just idiotic. >> robert litan, how much is the entire bush tax cut debit a false debate? in other words, how much is the tax code relative to economic activity bigger than if you tax the rich or tax the poor rather than whether you tax, whether you tax money, whether you tax consumption, whether you prohibit use taxation to go after things like fuel?

in other words, have we been forced into a false debit on jobs and taxes by talking about taxing the are rich or the poor? >> well it is not a false debate it is perfectly understandable why the two parties would contest the wisdom over raising taxes on upper income people. for god's sake that debate has been with us at least a decade, since the bush tax cuts n my role as sort of a middle person on this panel, i will throw out the potential compromise idea and that is while the democrats certainly want to make a big issue out of going back to the old marginal rates, it seems to me that a potential compromise, where they could get some republicans, and that is to extend the bush tax cuts, even for the top two% for maybe another two years citing the weakness of the economy but then saying in 2012 they are gone, and basically, making the -- and then making the 2012 election all about whether you want to go

for the tax for the very rich. >> at the end of the day, kick the can down the road is washington's number one spesh y'allity, right in the reason we are debating the bush tax cut wednesday george bush is playing golf, they set us up to talk about the tax cut wednesday bush is playing golf, the whole system is kind of screwry. if you were to look at the tax code relative to new business and job creation, robert, what have you -- what was the relationship, in your view? >> if you look at the number of new business starts it has been relatively constant the last 15 years, regardless of the tax rate so, i don't think it makes that much of a difference on new business formation. i want to go back to this business of the compromise. and on kicking the can down the road, the virtue here is that we still have a very weak economy and so you can make a plausible argument that we ought to defer raising those taxes, at least for a couple of years. and then, as i said, making the big 2012 election a lot about this issue and frankly, i think that is where comes with have

the upper hand. >> chris, you agree with that? >> i don't agree with that put put aside the policy argument, which withic think is wrong. part of the anger and frustration i think the american people have across the ideological spec strum what they see as a failure of the government to make the tough decision. here they have to make the tough decision whether we are going to be serious about address the deficit and the debt. the notion of saying, you know, let's wait two years and add in other words 700 billion because in 2012, another election year, of course we are going to pass or stop these tax cuts. it is just not going to happen. i think we have got to get serious, hopefully both parties, but that doesn't seem to be the case. we need to get serious about getting our fiscal house in order. and this i think, and nobody likes tax increases, butthy, i think is part about getting the fiscal house in order and in this country and to kick it down the road is a political mistake and policy mistake. >> interesting thing, dave weigle in regards to tax poll sit past 15 years having very limiteded correlation in

business development. would you have suspected that? >> it is an interesting thing. >> wouldn't v. it is a reflection of how the debate about taxes in this country is completely insane most of the time. >> thank you. >> i knew you would like that. >> yes. >> mitch mcconnell's answer to the president on this had, we need extend all the bush tax cuts. okay, over ten years, that costs $4 trillion. he has asked how are we going to pay for that he points to $300 billion of spending cuts and i -- we are all doing the math. >> drinking all day or something. whose math is it? this sounds like the $4 trillion for 100 billion in wall street bonuses. go on. >> right. so everyone here is right, that neither party is completely serious about this. i guess i saw slightly more seriousness from the president about this, but he is not asking for much. he is not asking for much sacrifice here. i don't think he should be. he should be pushing for tax -- the extension of the tax cut bus not accepting this framing that we need extend everything and have an economic benefit. look, we have had no estate tax

all year, that was one of the great dreams of the bush tax cuts of 2001. how are we doing? we are not taking in as much money as we should be, the deficit is increasing, i don't know what the economic benefit of that s i would love somebody to point that out but a lot of here to employment republican side and a lot of frustration from the democratic side. it doesn't make a lot -- it doesn't make any sense. >> at the core of that we are out of time here, but at the core of that is the argument that tax policy drives economic activity in some way and job creation that may actually be a false correlation, at least between this particular tax debate and job creation and economic activity. i'm sure that it has an impact i am just not sure it has an impact the bay weigh debate t chris, thank you, dave while, a pleasure, robert, real nice to make the acquaintance, robert lightan, thank you. up next our parting thoughts on tuesday's elections, what faces us tomorrow and in the

weeks ahead and why i'm more optimistic than i have been in a long time about the future of this country. coming up on "hardball" as well, in fact, after that, an optimistic chris matthews will talk to democrat chris cons, the man who will face tea party republican christine o'donnell in the delaware senate race. we are back with a reason to be optimistic for this country, right after this. i didn't miss a premium payment for 10 years. and i'm worried if i lose my job, i won't be able to afford insurance. when i graduated from college, i lost my health insurance. the minute i got sick, i lost my insurance. not anymore. not anymore. not anymore. america's healthcare reforms change lives for the better. to find out how it can help you, visit us at americasfairhealthcare.org it's not just fair, it's the law. ♪ [ female announcer ] good friends never run out of things to talk about... and during endless shrimp at red lobster, you can keep the conversation going over endless servings of your favorite shrimp. from classics like garlic shrimp scampi

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all right. welcome back. if nothingelse, yesterday proved that voter anger clearly can result in government change, even if the change that you saw yesterday is not a change that you like. if nothing else, for me, and i hope for you, it reminds all of us of our unique ability in this country to change our